Faxanadu is a 2D platformer with elements of role-playing and side-scrolling action.
The story follows a lone warrior as he returns to his hometown of Eolis, where disaster has struck. The sky rains meteorites upon the World Tree, causing chaos and destruction throughout the land. With the water supply dwindling and plants withering, the people are dying. The king asks for the hero's help in finding the source of the disasters and putting an end to the Dwarves' sudden hostility.
The game takes the player on a journey through various locations, including medieval towns, villages, fortresses, caves, and gloomy bogs. Along the way, the protagonist must collect gold, buy items, and fight off enemies like zombies, dwarves, giant snakes, and wyverns. The hero can use swords, daggers, or magic spells to attack his foes.
As the player completes areas and defeats enemies, they gather experience and advance through ranks, which are tied to a restore password called a "mantra". Higher ranks unlock more gold for respawning, while saving games is limited to shrines or temples with a guru. These locations also serve as checkpoints for when the game is restored or the hero dies.